open-market operation


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Open-market operation

Purchase or sale of government securities by the monetary authorities to increase or decrease the domestic money supply.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Open-Market Operations

The buying and selling of U.S. Treasury securities. The Federal Reserve conducts open market operations as a primary way of influencing inflation and economic growth. These securities are sold at certain interest rates as a way of controlling the money supply. See also: FOMC.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

open-market operation

an instrument of MONETARY POLICY involving the sale or purchase of government TREASURY BILLS and BONDS as a means of controlling the MONEY SUPPLY. If, for example, the monetary authorities wish to increase the money supply, then they will buy bonds from the general public. The money paid out to the public will increase their bank balances. As money flows into the banking system, the banks’ liquidity is increased, enabling them to increase their lending. This results in the multiple creation of new bank deposits and, hence, an expansion of the money supply.

See BANK-DEPOSIT CREATION, RESERVE ASSET RATIO, FUNDING.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
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References in periodicals archive ?
MUFG Bank (MUFG) (NYSE: MTU) (TYO: 8306) (8306.MU) has said that the People's Bank of China has granted approval for the bank to open-market operations in China, becoming the first Japanese institution and fourth non-Chinese lender to receive the approval, according to an online report.
MUFG Bank receives approval for China market operations
The CBC may further augment the scale of the open-market operation, when necessary, to mop up excess idle fund on the market.
CBC gears up to curb inflation
The People's Bank of China, which conducts regular open-market operations Tuesdays and Thursdays, has drained a net CNY83bn from the money market last week through its open-market operations.
-China PBOC sells CNY55bn one year bills
Insiders noted that the CBC will continue mopping up flooding idle funds in the market via open-market operation. From April this year, it has overbought NT$800 billion of negotiable certificates of deposits, thereby driving down the banking excess reserves to NT$86.9 billion in July, down from NT$147.2 billion in April.
CBC unlikely to raise interest rates for the moment
The People's Bank of China, which carries out regular open-market operations on Tuesdays and Thursdays, injected a net CNY28bn into the money market last week through its open-market operations.
-China PBOC selling CNY65bn in one year bills
The central bank, which performs open-market operations on Tuesdays and Thursdays, has drained a net CNY103bn from the money market last week.
-China PBOC sells CNY99bn in one year bills
The People's Bank of China (PBOC), which carries out regular open-market operations on Tuesdays and Thursdays, has drained a net CNY49bn from the money market last week.
-China's central bank sells CNY50bn in one year bills
The central bank had injected a net CNY76bn into the money market last week through its open-market operations.
-China PBOC sells CNY1bn in three month bills
People's Bank of China (PBOC), which carries out regular open-market operations on Tuesdays and Thursdays, has drained a net CNY67bn from the money market last week through its open-market operations.
China PBOC to sell CNY44bn one year bills
China's central bank has said that will sell CNY1bn (USD150m) worth of one-year bills in its regular open-market operation on Tuesday, reports Dow Jones.
-China PBOC sells CNY1bn in one-year bills
China's central bank has said that it will sell CNY23bn (USD3.39bn) worth of one-year bills in its regular open-market operation on Tuesday.
China PBOC to sell CNY23bn in one-year bills
The People's Bank of China (PBOC) has said that it was planning to sell one-year bills worth CNY22bn (USD3.3bn) in its regular open-market operation on Tuesday, reports Dow Jones.
-PBOC plans sale of one-year bills worth CNY22bn

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